5 Market Forces That Are Driving Digital Transformation

Big data, the IoT and mobile among them

Emerging digital expectations are changing customer loyalty to traditional products and brands. Getty Images
Headshot of John Newton

In the last few years, manufacturers and industrial organizations around the world have been investing more heavily in digital programs and initiatives to help accelerate the era of IT-optimized smart manufacturing. In fact, in the United States, the number of industrial device-to-device connections is expected to rise to nearly 180 million in 2020 from approximately 50 million in 2014.

In China, the rise in machine digitalization is projected to be double that of the U.S. in 2020. As digitization provides a path to frame, define and create Industrial Internet of Things (IIoT) strategies, many organizations have started to look at what is possible in the age of Industry 4.0 by embracing smart manufacturing.

However, despite global businesses’ rapidly increasing ability to unlock value from information, most companies are still nowhere near capable of dealing with the flow of information across the extended enterprise. Manufacturers, for example, face intense pressure to improve the way they manage product and engineering information.

Manufacturers’ first-generation processes and systems, built on 20-year-old technologies for 20-year-old computing environments, can’t meet new demands. They’re being left behind as new needs emerge for content management, process management and information collaboration. Ad-hoc workarounds often leave content insecure, out of compliance, or out of date.

Here are the five biggest forces intensifying manufacturers’ interest in new technologies and digital transformation:

1. Mobile and social

The rise of mobile and social technologies has changed not only where we work, but how we work. IDC forecasts the U.S. mobile worker population to surpass 105 million by 2020. Manufacturing organizations are under tremendous pressure to support connected, tech-savvy employees whose expectations have been shaped by consumer web services.

Today’s employees expect to find and share business and product-related information as easily as they can browse and buy a book online. They also expect their company systems to support remote and collaborative working styles. Millennials are highly mobile, always connected and demand IT solutions that allow them to get their work done independently of location, network and device. Their expectations for ease of content access intensify the pressure on IT organizations to modernize their ECM strategy.

2. Evolving customer expectations

With customers able to connect 24/7, the expectations have grown that their needs will be met not only through their chosen platforms but around the clock too. Emerging digital expectations are changing customer loyalty to traditional products and brands, as well as opening up new threats. To meet these new expectations, manufacturers face disruptions across the product lifecycle. Not only must they innovate faster, but they also must create products that are software enabled and connected (e.g. cars and even tractors).

These next-generation products require diverse engineering teams, who previously may have created unrelated products, to collaborate. These product lifecycle management changes must be supported with new forms of information that can be readily shared across the enterprise—and with partners and customers outside the firewall. Orchestrating product-related information across divisions, geographies, expertise and roles in the product lifecycle is a more complicated challenge than ever before.

3. Value of the extended enterprise

Exponential growth in connected activity and information flow is reshaping the modern manufacturing firm. Today, businesses are often a web of companies, contractors, suppliers, resellers, employees and customers. The ability to share content and process effectively across the extended enterprise is a must for modern manufacturers.

Manufacturing firms are extending their value chains. They use external collaborators for everything from product design and development, to marketing, sales and service. Partner and supplier input is crucial for optimized sourcing strategies and getting products to market. Manufacturers are investing in technologies that will optimize processes, increase transparency and facilitate collaboration throughout all levels of the value chain.

4. Big data, the IoT and the era of context

According to IDC, the market for big data technology and services will grow at a compound annual growth rate of 23 percent through 2019. A staggering 90 percent of it will be unstructured information like e-mails, documents and video. Big Data adds to the content management challenge making it bigger and more complex. Big Data analysis anticipates trends in product direction and customer usage and expectations as part of product development. Furthermore, as these pressures converge with new IoT capabilities, offline products are turned into ones always on tap with data. The digitized manufacturer now has a slew of new sources of product information that must be managed, updated, analyzed, and somehow combined with those produced from within.

Manufacturers report that different roles spend up to 30 percentof their time searching for information they need. Today, the contextual richness around content includes not just title and author, but also comments, preferences, location, and unique attributes such as supplier name or purchase order number. Successful manufacturers use contextual data to drive business processes that move product information to the right person at the right time, within the right business application.

5. Hybrid cloud IT infrastructure

Manufacturers aren’t known for going overboard investing in advanced IT, so it’s interesting that leading-edge cloud computing technology seems tailor-made for them. That’s essentially because the realities of today’s enterprise architecture demand a new approach to content security and compliance in sync with IT support for the modern business.

To support mobile users and external partners/suppliers, many manufacturing companies are moving business content to the Cloud. Leading analyst firms such as IDC and Forrester predict a major shift to hybrid Enterprise Content Management. This next-generation approach involves storing content both on-premises and in the Cloud, with seamless syncing between the two locations. Hybrid ECM meets IT’s need for control and compliance, while freeing business users and external collaborators to be more productive.

is CTO and Founder of Alfresco Software